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Thursday, 6 February 2014

EU Settlement With Google Unacceptable Consumer Watchdog Says

The settlement to end the European antitrust investigation of Google described today by Competition Commissioner Joaquin Almunia is unacceptable, Consumer Watchdog said and the group added that Google's third Commitment document must be made public.

"The deal as outlined by Almunia bizarrely not only allows Google to profit from the traffic it diverts from competitors, but also from the new possibilities to charge for their inclusion among the rival links listings," said John M. Simpson, Consumer Watchdog's Privacy Project. "The deal as outlined would give Google more power over competitors than is now the case, ultimately limiting consumer choice and driving prices higher."

Consumer Watchdog objected to the procedure Almunia is now following. After reviewing comments about both of the Internet giant's first two settlement proposals, Almunia termed them each inadequate. The third Commitments have not been made public.

The settlement deal would only cover Google's European sites, such as Google.fr, Google.co.uk, Google.ie and Google.de. It would not apply to Google.com.

"What is Almunia afraid of?" asked Simpson. "A settlement of this importance must face public scrutiny."

Consumer welfare is the ultimate test of any antitrust settlement, Consumer Watchdog said. Consumer groups on both side of the Atlantic – BEUC and Consumer Watchdog – have both objected to Google's earlier proposals. Both times the proffered Commitments failed to meet the standard of consumer welfare.

The heart of the problem is simple, Consumer Watchdog said. Google has developed a substantial conflict of interest. It no longer has an incentive to steer users to other sites, but rather primarily to its own services. It is becoming even more effective at this and has a greater incentive to engage in manipulation now that it is merging data collected across all its services. The only way to deal with this conflict is to remove it, the nonpartisan, nonprofit group said.

"Ideally, there needs to be a separation of Google's different services and assets," said Simpson. "At a minimum any remedy must insist that Google use an objective, nondiscriminatory mechanism to rank and display all search results – including links to Google products and services."

Consumer Watchdog noted that while DG Comp's procedure manual provides that no market test is required for "smaller ('technical') changes to the commitment text" it would be necessary if "the revision of the commitments is substantial."

"Frankly, given the results of the two earlier market tests, we cannot understand how the third proposal could be anything other than a substantial change from the earlier woefully insufficient remedies proffered by Google if it is to be accepted by you," wrote Simpson in a letter to Almunia last week. "In other words for the third proposal to be remotely viable, it must be a substantial change. If it is such a significant change, then – by your own procedures – you must market test it."

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